OOO Brunswick Rail Mgmt. v. Sultanov, No. 5:17-cv-00017-EJD, 2017 U.S. Dist. LEXIS 2343 (N.D. Cal. Jan. 6, 2017).
The court partially granted the plaintiff, OOO Brunswick Rail Mgmt., a motion for emergency evidence preservation measures, finding “significant concern” that defendants had potentially destroyed relevant evidence.
OOO Brunswick Rail Management and Brunswick Rail Group Limited (collectively, “Brunswick”), sued former employees Richard Sultanov and Paul Ostling for misappropriating trade secrets. Brunswick claimed that Sultanov and Ostling “have already disclosed and plan to continue to disclose [its] trade secrets to creditors.”
Brunswick launched an internal investigation when it noticed “‘unusually secretive’ behavior from Sultanov.” That investigation revealed that Sultanov “sent several confidential documents to his personal email account without authorization [and] then deleted the sent messages and emptied his trash folder.”
Sultanov and Ostling communicated by phone with each other and with a creditor representative whom Sultanov was “prohibited from contacting.” Ostling also “received unauthorized confidential materials at his personal email account” that he “forwarded to the creditor’s representative and to Sultanov.” Additionally, Sultanov “refuse[d] to return a company-issued mobile phone and laptop.”
Therefore, Brunswick filed this motion asking the court to order protective measures, including a seizure and preservation order as well as a temporary restraining order.
The court began by pointing out the parties’ “duty to preserve evidence once a complaint is filed.” Because of this duty, a party must demonstrate “a significant concern that potentially relevant evidence will be destroyed” before the court will order “stricter preservation requirements.” To enter a preservation order, the court must find “(1) threats to preservation of the evidence, (2) irreparable harm likely to result to the party seeking preservation, and (3) the capability of the custodian to maintain the evidence sought to be preserved.”
In this case, the court concluded that “Brunswick has satisfied these three requirements.” Based on their conduct, Sultanov and Ostling might delete information themselves, irreparably harming Brunswick. Further, their personal accounts were hosted by third parties that were under no duty to preserve emails absent a court order. Accordingly, a preservation order, encompassing both defendants and their third-party email hosts, was appropriate.
Brunswick also moved for an order under the Defend Trade Secrets Act “to seize the company-issued laptop and mobile phone” that Sultanov had refused to relinquish. The court rejected that request as “unnecessary because the [c]ourt will order that Sultanov must deliver these devices to the [c]ourt.” Under that order, the “devices may not be accessed or modified” before their surrender.
Brunswick next moved for expedited discovery, which requires a showing of good cause. However, because Brunswick offered inadequate support for this request, the court denied this part of the motion.
Finally, Brunswick requested a temporary restraining order and the “extraordinary remedy” of a preliminary injunction. Such remedies require Brunswick to show four things: “(1) that it is likely to succeed on the merits, (2) that it is likely to suffer irreparable harm in the absence of preliminary relief, (3) that the balance of equities tips in its favor, and (4) that an injunction is in the public interest.”
The court again found that Brunswick had satisfied those elements, given the “significant threat of irreparable injury.” Because the application was made ex parte, Brunswick also had to, and did, satisfy Federal Rule of Civil Procedure 65(b)(1) by certifying that “notice [to Sultanov] would render the requested relief ineffective.”
The court therefore granted the motion in part, ordering four remedies:
- Google and Rackspace must preserve the defendants’ email accounts.
- Sultanov and Ostling must not destroy any information.
- Sultanov must surrender his company laptop and mobile phone to the court.
- The parties must appear at a hearing on the motion for the preliminary injunction.
Takeaways to boost e-discovery success
If you believe that your opponent will destroy evidence, alert the court immediately. The court can provide an extra layer of protection, but only if you convince it that a true threat exists. Where an ex parte motion is appropriate, comply with the rules by providing an attorney certification, as Brunswick did.
Also, do not rely on the egregiousness of the facts to carry the day on every element of a motion. Brunswick failed to explain to the court why expedited discovery was appropriate. Despite the exceptional nature of the case overall, nothing in this request directly addressed why the court should advance the discovery timeline. Allege specific facts and make detailed arguments supporting each type of relief requested.
(Ultimately, at the hearing on January 20, 2017, the district judge denied the plaintiffs’ request for a preliminary injunction and expedited discovery because the court lacked personal jurisdiction over the defendants.)
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